* The Hon orable A drian G . Duplan tier, United States D ist ric t Judge

for the Eastern Dist

rict of Louis iana, si tting by designation.

1 RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Six

th Circuit Rul e 206

ELECTRO NIC CIT

ATION: 2003 FED App . 0286P (6th C ir.) File Name: 03a02 86p.06



### UNITED STATES COURT OF APPEALS

FOR THE SIXT H CIR CUIT

_________________
In re : E DWIN M. M AUGHAN , S R ., Debtor.

J OHN P. N ARDEI ,

Plaintiff- Appellant

,

v.

E DWIN M. M AUGHAN , S R ., Defendant-Appellee. X

- - - -
> , - - - - - - - - N No. 01-4151

Appeal f rom the B ankruptc

y A ppellate Panel of t

he Sixth Circ

uit. No. 98-41905—William T. Bodoh, Bankruptcy Judge.
Submitted: March 28, 2003 Decided and Filed: August 14, 2003

Befor e: MERRITT and B ATCHEL DER, Circ

uit Judges ; DUPLANTI

ER, District Judge. * 2 In re Maughan No. 01-4151

_________________ COUNSEL

ON BRIE F: Mark D. Shepard, BABST, CAL LAND , CLEMENTS & ZO MNIR, Pittsburgh, Pennsy lvania, for Appellan t. Andrew W. Suhar, Youngstown, Ohio, for Appellee.

_________________

OPINION

_________________ ALIC E M. BATCHELDER, Circuit Judge. Plaintiffappellant John Nardei appeals an order from the Bankr uptcy Appellat e Panel (“BAP”) of the Sixth Circuit reversing and remandinga judgment of

the United States Bankruptcy Court for the Northern District of Ohio. Nardei, a partially secured cred itor of defendant-appellee Edwin Maug han, argues that the BAP err

ed in rev ersing

the bankr

uptcy court’s o rder granting Nardei a n extension

to file a c omplaint ob

jecting to discharge. Altho u gh Nar dei ackn owledg es that he

failed to file timely either his complaint or his request for an extension of time for f

iling tha t complain

t, he arg

ues that the bankruptcy

court correctly

held that Bankruptcy

Rules 4004(a) and 4007( c)—the r ules governing

th e fi ling of complain ts objecting to discharge under 11 U.S.C. §§ 523 and 727—are not jurisdictional in nature
, but instea d establish only filing deadlines that are subject to equitable tolling. The BAP’s opinion finding that those rules are jurisdictional and reversing the bankruptcy c ourt, Nard ei argues, must be reversed. Because we find that the pr eceden t of this ci

rcuit compelsus to conc lude that these ru les are not jurisdi ctional,
we will reverse the order of the BAP and affirm the dec ision of the ba nkruptcy court.No. 01-4151 In re Maughan 3

I. BACKGROUND

The relati onship between these parties began whe n John Nardei, a resident of Youngstown, O hio, purc hased U. S. Gold Eagle coins from Edwin Maughan, who operated a coin and jewelry business in Pittsburgh, Pennsylvania. Over time, Maughan convinced Nardei that hecould increase the return
onNardei’s investment by trading the coins according to the fluctuations inthe price of gold. Based on this advice, Nardei gave h is ex isting investment of gold coins and additional pay ments for the p

urchase of more c oins to Mau

ghan; in return, Maughan gave Nar dei receipts detailing

the number

of gold coins p urchased in each transaction. Maug han asked Nardei to g et more individuals involved in the investment plan, which Nardei did. Eventually , Maughan began issuing promiss ory

n otes to Nardei and the other investors covering the total a mount inve sted over

the y ears.
After Ma ughan i ssued sev eral mor e notes, i tbecame clear to Nardei that his investment was not being used to purchas e gold coins, but was being used to purchase jewelry to be resold in Maughan’s retail location. Nardei sued Maug han in the Common Pleas Courtof Allegheny County and obtained
a judgment on the notes in the amount of $1,051,503.72, plus interest and costs. The parties then entered into a settlement whereby Maughan agree d to pay Narde i $1,200,000.00, withoutinterest, over a specified number of y ears. Maughan failed to comply with the terms of the ag reement and eventua lly filed a vol untary petition for bankruptcy under Chapter 7.

Inthe proc eeding s that foll owed, the bankruptcy court set October 19, 1998, as the deadline to file a Complaint Objectingto the Discharge of the Debt or or t o Determine Di sch argea

bility of Certain Debts, pursuant to Bankruptcy 4 In re Maughan No. 01-4151

1 Rule 40 04(a) p rovides:

In a chapter 7 liquidati on case a complaint objecting to the de bt or 's discharge under § 727(a) of the Code sha ll be filed no late r than 6 0 da ys after the fir st dat e set for the meeting of creditors under § 341(a). In a chapt er 11 reorgani zati on case, the compl aint shall be filed no lat er than the f irst dat e set for t

he hearin g on c onfirm ation. At least 25 days' notice of the time so fix ed shall

be givento the United States t rustee and all cr editors

as provided in Rule 2002 (f) and (k), and to the trus tee and t he trustee's attor ney.

2 Rule 40 07(c) p rovides:

A complaint

to deter mine th e discha

rgeabil ity

of a d eb t under § 523 (c) sha ll be filed no late r than 6 0 da ys after the first d ate set forthe meeting of

creditors under § 341(a). The court shall give all creditors no less than 3 0 da ys' notice o f the time so fixed in the manner provi ded in Rule 2002. O n m otion of a pa rty in int erest , af

ter he aring on notic e, the court may f or cause extend the ti me fi xed unde r th is subdi vis ion. The moti on sha ll be fil ed befor e th e ti me has expi red.

3 Rule 200 4 pr ovid es, in relev ant pa rt:
(a) Ex amina ti on on mot ion

On motion of any party i n interest , the court may order th e
exam ination o f any entity.
(b) Sc ope of e xamin ati on

The examinat ion of an enti ty un der thi s rul e o r of th e debt or
un der §§ 3 43 o f the Co de m ay relate only to th e acts, co nduc t,

or property or to the li abilit ies and financi al condition of t he debtor, or to a ny matte r which may affe ct t he ad mini str ati on of the debtor' s est at e, orto the debtor's right t o a discharge. In a family farm er 's debt adjust ment case under chapt er 12, an in di vi du al 's debt adjus tment case under chapter 13, or a reorg aniz ati on case under chapter 11 of the Code, ot

her t han f or the reorganization of a rai lroad, the examinat ion may also re late Rules 4004(a) 1 and 4007(c). 2 In August of 1998, Nardei filed
a motion under

Bankruptcy

Rule 2004 3 to examine MaughanNo. 01-4151 In re Maughan 5

to the operat ion of

any busi ness and th e des irability of its contin uance, the s ource of anymoney or pr ope rty acq uired or to be acqui red bythe debtor for purpos es of

consummating a plan and the consi derat ion g iven or of fer ed th erefor, and any ot her matter relevant

to the case or to t

he formulation of a plan.
(c) C omp elling atten dan ce an d pr odu ction o f doc ume nts

The attendance of an enti ty for examinat ion and for the product ion of documen ts, wh ethe r th e exami nati on is to be conducted wit

hin or wi thou t t he distric t in which th e case is pending, may be compell ed as pr ovided in Rul e 9016 for t he atte ndance of a witness at a hearing or trial. As an officer of the

cou rt, an attorney may issue an d si g n a su bpoena on be half

of the court for the district in which the exam ination is t o be hel d if the attor ney is ad mitted to pract ice in t hat court or in the court in which the cas e is pending. under oath and determine the appro priateness of filing objections to the discharge of the set tlement debt. The bankruptcy

court granted themotion and orde red Maug han to appear for an examination on August 21, 1998, and to provide specific documents sought by N ardei. Although Maughan appeared for the Ru

le 2004 exa

mination, he failed

to comply fully wi th the order to produce the documents. He did, however, prom ise t o provide the missing

document s pr om pt ly.

Whenthe October

19, 1998, deadline for filing a complaint arrived, Maughan had still not produc ed a ll the doc uments requ ested for the Rule 2004 examination. Three day s later
, onOctober 22, 1998, citing Maughan’s fa ilure to produce the documents and, in the alternative, excusable neglect, Na rdei filed a Motion for Extension of Time to Object to Discharge. After initially granting Nardei’s motion, the bankruptcy court allowed Maughan to file a Motion in Opposition to Nardei’s extension request. The bankruptcy court considered the parties’ motions and ordered that the time to file a complaint be extended to a date twenty da ys fo llow ing t he actual day Maughan complied with the court’s prior order directinghim 6 In re Maughan No. 01-4151

4 The only bank

ruptcy rule pr operly bef

ore the ban kruptcy

court and bef ore the BAP and this court on appeal i s Rule 4007(c), because, as Na rdei’s brie f s ays , “ [a]t tri al, for

st rat egic reas on s, counsel for Nardei choo se [sic] to p ursue o nly Na rdei’s c laim tha t D eb tor’s de bt to him is excepted from d ischarg e [Ru le 4007(c)] because it was obtained by fraud and false pre tenses p ursuan t to 11 U .S.C. § 523(a)(2)(A). ” Althoug h each pa rty briefed and argued the impact of both rules in thi s case, the b ankruptc y court discussed only Rule 4007(c), and our holding i s therefore li mit ed to Rul e 4007(c). Ho wever, because the reasoning and rationa le of both r

ules are co nsistent, we look to case s app lying bo th rules for guidance on the que stion before us. to produce specified documents for the Rule 2004
exam ination. Within the time allowe d by the extens io n , Nardei filed complaint under 11 U.S.C. § 523(c), alleging that Maughan had obtained the m one y f rom Nard

ei by false pretenses or

falserepres entation s. The ba nkruptcy court he ld
a hearing in this adversary procee d ing on August 22, 2000, and issued an opinion on January 9, 2001, findin g that Maughan’s debt to Na

rdei was obtained

through false pretens es, a false representation or actual fr aud, and was therefore excepted from discharge un der 11 U.S.C. § 523(a)(2)(A). Maugh anappealed the bankruptcy court’s decision to t

h e Bankruptcy

Appellat e Panel of the Sixth Circuit, arguing that the bankruptcy c ourt erred by granting Nardei’s

request for an extension to file his compl aint. The BAP agreed, and, holding that the time l imit s set fort h in Bank

ruptcy Rule 4007(c) 4 are jurisdictional in nature and not akin to statutes of limitation, reversed the ban kruptcy cour

t’s decision. Nardei’s timely appeal to this court followed.

II. DISCUSSI ON

We independently re

view the decision of the bankruptcy court t hat come s to us by way

of appeal from a Bankruptcy Appellate Panel. See In re Isaacman , 26 F.3d 629, 631 (6th Cir. 1994); In r e Cas sell , No . 00 -45 23, 200 1 U. S. LEXIS 13969, **3-**4 (6th Cir. June 15, 2001) (unpublished). TheNo. 01-4151 In re Maughan 7

first que stion for t

his court to decide is whether the deadline provided in Bankruptcy

Rule 4007(c) is jurisdictional, such that the bankrup tc y court ha s no author ity t o alter it , or is
more comparable to statutes of limitation and subject to the court’s equitabl e auth ority . We review de novo this question of law. In re Downs , 103 F.3d 472, 476-77 (6th Cir. 1996).

The Federal Rules of Bankruptcy Procedure s tat e that “a complaint to determine the dischargeability of a debt pursuant to § 523(c) of the Code shall be filed no t later t ha n 6 0 d ays following the fi rst da te set for th e meet ing o f credi to rs held pursuant to § 341 (a).” F ED

. R. B ANK

. P. 4007(c). Ad di ti on al ly, any motion to extend thetime for filing such a complaint “shall be made bef

ore t he time [to file the complaint] has expired.” Id . Under Bankruptcy Rule 9006, courtsmay enlarge the time for taking action under Rule 4007 “o nl y to the exten

t and unde

r the con ditions sta

ted” in Rul e 4007. F ED

. R. B ANK

. P. 900 6(b)(3). These rules, however, must be rea d together with the genera l powers given to the courtsin bankruptcy

under 11 U.S.C. § 105, which provide s:
The court may issue any

order, process, or judgment that is necessary

or appropriate to carry

out the provisions of this title. No pr ovis ion of this title providing for the raisingof an issue by

a party in inte rest

shall be construed to preclude the court from, sua sponte, taking any action or

making a

ny d etermina ti on necessary

or appropr iate to enforce or implement court orders or rules, or to pre vent an a buse of pr

ocess. 11 U.S.C. § 105(a).

There is no quest

ion that Na

rdei fa iled to file hismotion for
an extension prior to the

expiration

of Rule 40 07(c)’ s sixty

day deadline. Nardei, however, ar gues t hat Maughan’s failure to comply with a prior orde r from the court led t o th e late fili ng, and Section 105(a) authorizes the court to use it s equitabl e power to toll the filing deadline and prevent an abuse of process

. 8 In re Maughan No. 01-4151

5 Rule 4003(b) is i ncluded i n the s eries of r ules alo ng with R ule 4007(c) who se extension i s limit ed by Rule 9006 (b)(3). The Supreme Court had an opportunity to addr ess a similar rule i n Taylor v. Freeland &Kronz , 503 U.S. 638 (199 2 ) (examining Bankrupt cy R ule 4003, which governs the debtor’s list of property claimed a s exem pt unde r 11 U.S.C. § 522 on the schedule of

assets re quired to

be filed by R ule 1007). Under the rule at issue in Taylor , a trustee or creditor “may file obje ctions tothe list

of property c laimed as exempt within 30 days afte

r the conclusionof the meeting of creditors held pursuant to Rule 2003(a) . . . unless, within such period, further time is granted by

the c ourt .” F ED

. R. B ANKR

. P. 4003(b). 5 The trustee in Taylor neither timely moved for an extension of time to o

bject nor timely objecte d to the debtor’s including onthe list of exemptions proceeds from a pending lawsuit, believing that the lawsuit had no value. Taylor , 503 U.S. at 641. After the debtor

received a significant pay ment insettleme

nt of the la

wsuit, the trustee a ttempted t

o object t o the inclusion of the proceeds on the list o f exemptions. Id

. The Supreme C ourt aff

irmed the appellate court’s holding that the tr uste e had failed to raise a timely objection to the exemption, and

that the debtor therefore could not be required to turn over the proceeds. Id . at 642. Looking at the specific allowance under Rule 4003(b) for trustees and cre ditors tofil e objections within thirty day s of the initial creditors’ meeting , the C ourt found by “ne gative implication ” that the rule “indicates that creditors may not object after 30 day s ‘unless
, within such period, further time is granted by

the court.’” Id . at 643. The Court held that even if the trustee was correct, and the debtor imprope rly included the lawsu it proceeds on the exemption list, the trustee could notcontest the exemption . “Dead lin es may

lead to unwelcome results, but they prompt part ies to act and they produce finality.” Id . at 644. The Court explici tl y declined to address the question of whether the bankruptcy court could have extended the time for f iling the objection by

invoking itsNo. 01-4151 In re Maughan 9

6 We did, however, specifi cally dis tinguis h Ta ylor in deciding whether t he bankrupt cy court

had erred i n refu sing to use i ts equi tab l e power to ac cept t he lat e fi lin g, not ing t hat t here the Supreme Court h ad not addressed the issue of t he bankru pt cy court’s equitable p owers. Isaacman , 26 F. 3d at 635. equitabl e power

under Section 105(a), noting that the trustee had raised th is issue for the first

time in his opening brief on the merit s in the Supr

eme Court

. Several lower court s appl ying Taylor have determined that the deadlines within the Bankru pt cy Rules cre ate jurisdictional bars and not statutes of limitation. See, e.g., First Deposit Nat'l Bank v. Glover ( In re Glov

er) , 212 B.R. 860, 862 (Ba

nkr. S.D. Ohio 1997); Goodwin v. United States Fid. & Guar. I

ns. Co. (In re Goodwin) , 215 B.R. 710, 714 (Bankr. W.D. Tenn. 1997). Th is circui t, however, has issued only one opinion addressing the apparent conflict between the filing deadlines of the Bankruptcy Rules and the bankruptcy court’s extensive equitable power. In In re Isaacman , 26 F.3d 629 (6th C ir. 19 94), w e held —wit hout menti onin g Taylor in
our discussion of this issue 6 —that Rule 9006(b)( 3) prohib its a court from

sua sponte

extending

the time in

which tofile a dischar geabil ity complaint, but the rule “d oes no t preven t a bankruptcy

court from exercising its equitable powers under 11 U.S.C. § 105(a) in accepting an untimely filed complaint.” Id . at 632. At issue in Isaacman was an error created by the bankruptcy

court itself establishing two separate dea dlines for filing complaints; the creditor relied u pon the se cond date

and filed an untimely complaint after the first deadline e xpired. We limited our holding to a situation in which a bankruptcy court erroneously se

t a second bar date and a creditor
reasona bly relie d upon that s econd date w hen fi ling a n untimely complaint. Id. (joining the Ninth C ir c uit, In re Anwiler
, 958 F.2d 9 25 (9th Cir. 1992) , and the T enth Circ uit, In re Themy , 6 F. 3 d 688 (10th Cir. 1993) , in this spe cific holding); see also In re

Moss , 289 F.3d

540, 541-42 (8th Cir. 2002) (adoptin

g the re aso n ing of Isaacman in a factually 10 In re Maughan No. 01-4151

7 Sp ecifically, the court sai d, “ The rul es we have j ust descr ibe d d o not, as a matte r of textua l interpre tation, ad dress the issue. Altho ugh R ule 9006(b)( 3) restri cts the grounds upon which the bankrup tcy court may enlarge the t ime for

acti ons requi red by Rules 4004(a) and 400 7(c), these restrictions stil l vest a gr eat d eal of d iscretio n in the b ankru ptcy co urt.” Kontrick
, at 730. W e find that statement somewhat puzzling, inasmuc h

as Rule 9006(c)(3) pro vides that t he court may enlarge the t ime for taking acti on under these rules “ only to th e extent and under t

he condit ions s tate d in those r

ules. ” ( ital ics added.) Rules 4004 and 4007 both permit the court to extend the ti me on mot ion of a party in i nter est , but

suchmoti on “shall be made before su ch time h as expir ed.” That language in the t ext of those rules sound s like a condit ion to us, and rather than vesti ng discretion i n the court, i t appears to us to li mit that discretion. similar case). But the Isaacman decision cracked o pe n the dooro f equity

through which the

bankrup tcy

court mig

h t accept an untime ly c omplaint.

Other circuits have gone bey ond the limited facts of Is aacman and have found that, in general, the de adlines ar e notjurisdict

ional in na

ture. For example, the Four thCircuit, in Faroukiv. Emirates Bank Int’l, Ltd. , 14 F.3d 244, 248 (4th Cir. 1994), held that the Rule 4004(a) deadline is not jurisdictional and t hat the rules “do not preclude the bankruptcy

court from exerci sin g its equ itable powers in extraor d inary

cases.” The Seventh Circuit compared the filing deadlines to statutes of limitations, first finding that the text of the rules and statutes failed to resolved the issue 7 and thenexamining

the structure, le gisla

t ive history and underlying

policy of the ru

le s and the related statutory scheme. In re Ko ntr ick, 295 F.3d 724, 730-33 (7th Cir. 2002). The S eventh

Circuit c oncluded

that the Su

preme Court’s decision in Tayl or wa s not dispositive and held that the timelines s provisions are not juris d ictional. Id . at 733. The Second Circuit has also concluded that the deadlines imposed by thes e Bankru

ptcy Rules are

not jurisdi ctional. European Am. Bank

v. Bene dict (I n re Bene dict) , 90 F.3d 50, 54 (2 d Cir. 1996 ). The c ourt divid ed the ca ses on this

is su e into three groups: (1) cas es findi ng that the time periods imposed by the rules ar

e jurisdictional (citing severaldistrictNo. 01-4151 In re Maughan 11

and bankruptcy c ourts); (2) cases that fa il t o reach the jurisdi ctio nal question, but permit late filings when the ba nkruptcy court ha s erred (essent ially th e Isaacman situation) ; and (3)cases explicitly re jecting the viewthat the ti

me limits ar

e juris di ctional and allowing the exercise of the court’s equitable power to extend the time for filing complaints. Id . After sp ecifically a dopting the reasoningfrom the third group of cases, the court provided an additional r eason for reje cting the chara cterizat ion of the se time requ irements as jurisdi ctional:

Our conclusion is also consistent with the line of cases that has allowed an extension of the time period when the creditor was affirmatively

misled by the ban

krupt cy court
as to the filing deadline. See e.g., In re Themy , 6 F.3d at 688

. S ince equitable considerations cannot excuse a jurisdictional defect
, there is implicit in those cases the concept that [Rule 4004 (a) and] 4007( c) mere ly establish[es] a filing deadline.

Id

. The merits or faults of the reasoning in Isaacm an an d of other courts on

this issue i s o f little moment here, since we
are bound by our

decision in Isaacman unless it is inapposit e to this case. The firs t question before us, then, b oils down to whether Isaacman ’s narrow holding that the bankruptcy

court could use its eq

uitable p ower to c ircumve nt the time

limits required by Rule 4007(c) whe

re an error of the

court itself had caused t he untime ly

filing, requires the legal conc lusion that Rul e 4007( c)’s

time l imits a

re no t juri sdict

ional. We conclude that it does. By

permittin g equity to trump the filing deadline set by Rule 4007(c ) in one particular circumstance, Isaacman , despite it s explicitly narrow hold ing, compels the conclusionthat the dea dline is no t jurisdictional, for to hold to the contrary

would be to hold

that equitable considerations
can excuse jurisdictional defects. Since “a litigant’s failure

to clear a jurisdic

tional hur

dle can never be

“harmle s s” or waived by a court,” Torres v. Oakland Scavenger Company
, 12 In re Maughan No. 01-4151

487 U.S. 312, 317, n. 3 (1988), the filing deadline cannot be jurisdict ional. Rather, th e rule is a statute of limitation—or simply a deadline —that is generally

subject to the defenses of waiver, estoppel , and equ itabletolling. See United States v. Locke , 471 U.S. 84, 94 n. 10 (1985). Havingdetermined the BAP erred in its legal conc lusion, and that the bankruptcy c ourt correctly concluded t

hat the time limit s in Rule 400 7(c) ar e not juris dictiona

l, we must next determine whethe

r the ban kruptcy court pr operly used its equitabl e power by allowing Nardei t o file his u

ntimely objecti on. We revie

w the ban

kruptcy court’s use of its equitabl e power for an

abuse of discretion. See Isaacman , 26 F.3d at 633. “We will find an abuse of discretion only upon a definite and firm conviction tha t the district court committed

a clear error of judgme

nt.” In re Kisse

birth , 273 F.3d 714, 721 (6th Cir. 2001).

There are f

ive factors that should be considered when decidingto apply the doctrine of e quita ble tolling: “The factor s ar e: (1) la

ck of actual notic e of filin g requ irement; (2) lack of c onstruct

ive knowl edge o f filing

require ment; (3) dili gence in pursu ing on e's rights; (4) absence of prejudice to the defe

ndant; an d (5) a pl aintif

f's r easonab leness in remainingignorant

of t he notice requirement.” Andrews v. Orr , 851 F.2d 146, 151 (6th Cir. 1988). Since Nardei did not claim lack of notice or knowledge of the filing deadline, “our inquiry must focus on t he d iligenc e used by the plain tiff in pursuing its rig

h ts and the resulting prejudice, if any, to the d efenda nt. ” First Bank System v. Begue (In re Be gue) , 176 B.R. 801, 804 (Bankr. N.D. Ohio 1995).

Inits opinion granting the extension, the bankruptcy c ourt found that Maughan’s failure

to comply

with the court’s order to turn over d ocu mentation justified the extension. Sp ec if ic al ly, the court recognized the “ dilemm a” faced by Nardei and

his counsel; since Bankruptcy Rule 9011 creates
anaffirmative obligation on the creditor to investig ate fully before initiating an adversary complaint, it would have beenNo. 01-4151 In re Maughan 13

improper for Nardei to file his complaint before Maughan turn ed over all the relevant documentation. The recor d indicates that Nard e i continually tried to ge t the documentationfrom Mau ghan, only

to be misled by Maughan’s promise that the in forma tion was fo rthco ming. We find no error in

the district court’s conclusion that Nardei
was diligent in seeking to enforce his ri ghts and that Maughan’s delay

in produc ing the d

ocuments contributed

to Nardei’s failu re to t imel y file his compl aint. And al thou gh Nardei could have filed

his motion for

an extension within the time decreed by

the rule, he filed tha

t motion only

th re e d ays outof rule, and we find no error in the bankruptcy c ourt’s implicit co nc lu si on th at th is de la y, too, was par tly a ttributab le to Maugha

n’s condu

ct o rin the court’s express conclusion that Maughan suffered noprejudice from the extension. The bankruptcy

court did

not abuse

its discre

tion by using its
e qu itablepower to ensure that the debtor was not permitted “to frustrate the ability of

a litigant to comply

with appli cable lawby failing

or neglecting to adhere

to lawful orders of

the Court.”

III. CONCL USION

For the f oregoingreasons, we REVERSE the order of the Bankruptc y

Appeal Panel and AFFI

RM the decision of the Bankruptcy Court. We RE MAND t he case for pro ceedin gs consistent with this opinion.